Roll-your-own CDs roll on

The net is a bootlegger’s paradise. Can the music industry gets its share?

THE spread of pirate audio in the form of illicit “MP3” music files on the World Wide Web is forcing the record industry to find better ways of getting recorded music to the public. For all the legal threats and derision the record companies have heaped on it, MP3 could be their saving.

Much has happened to the distribution of music over the Internet since the MP3 phenomenon took campuses around the world by storm two years ago. Short for Motion Picture Expert Group-1/Level-3, MP3 is widely used in the digital TV and multimedia business for compressing the audio part of a video programme. Though it is a “lossy” form of digital compression (sounds masked by other sounds are discarded or “lost”), an MP3 music track scrunched to a twelfth its size on a CD sounds to an ordinary ear every bit as good as the original when played back.

A CD holds more than 600 megabytes of digitised music, with a typical five-minute track accounting for around 50 megabytes. To transmit all the digital bits in a single CD track on the net would take two hours with even the zippiest modern modem; to transmit the whole CD would take more than a day. But if you compress a music file using MP3, it takes little more than ten minutes to download. And it takes up only four megabytes, not 50 megabytes, of hard-drive space on the downloader's computer.

What has infuriated the record industry is the way MP3 has made it possible for computer-savvy teenagers to distribute CD-quality music free over the Internet—and so allow pristine digital copies of the original to proliferate. Though widely used, transmitting copies of music titles in this way is generally illegal. Most of the MP3-compressed songs posted on websites are bootlegged material belonging to major record companies, music publishers and recording artists.

Thousands of websites now exist on the Internet where fans can not only locate the music titles they want, but also get all the software tools needed to play the MP3 songs they have downloaded. A minority of MP3 websites are legitimate, offering only music that the copyright owners (typically “garage bands” hoping to be discovered) have agreed to distribute in this way. But even respectable websites feel no compunction about helping visitors find the MP3 titles they want to download. Lycos, one of the most popular sites on the World Wide Web, has recently installed a database listing more than 500,000 MP3-formated songs. A San Diego distributor of free music gets more than 200,000 visitors a day to its website.

Pundits from the industry claim that more than 15m copies of free software packages (WinAmp, FreeAmp and Sonique) for playing MP3 music files on personal computers have been downloaded from the Internet so far. If only one in ten of them is used regularly, the record industry could already be losing sales worth hundreds of millions of dollars annually—equivalent to its losses caused by pirate CD plants in China, Mexico and elsewhere.

It is not just the speed and ease with which web audio can be banded around the globe that is driving the Recording Industry Association of America (RIAA) nuts. It was bad enough when college kids downloaded bootlegged MP3 tracks and played them back through clunky sound systems attached to their personal computers in college dormitories. But then, in October 1998, along came the Rio PMP300, a pocket-sized MP3 player costing $199 that can store dozens of tracks and play them back, Walkman-style, through headphones while on the move.

If you can't beat them

The RIAA has tried every trick in the book to prevent Diamond Multimedia Systems of San Jose, California, from selling its Rio player. To no avail. Diamond has shipped more than 150,000 units and cannot keep up with demand. Envious of its success, a dozen other makers are about to plunge in with MP3 players of their own. Industry pundits expect 2m portable players to be on the streets by next Christmas. With that many players in circulation, MP3 could become the industry standard for web audio. Although there is nothing wrong with MP3 technically, it works without any form of copy protection. And that is anathema to the RIAA.

The record companies and film studios have grudgingly accepted that banning digital recording is not an option. But they have managed instead to get all the big consumer-electronics firms to include encryption circuitry in their digital recorders so the machines cannot make “serial copies”—ie, produce a copy from an existing copy. Although a first-generation recording can be made from any digital source, be it a CD, DVD (digital video disc) or satellite TV broadcast, the serial encryption circuitry ensures that the recording is effectively a mule—ie, incapable of breeding second-generation copies.

Unable to beat the bootleggers, the RIAA now plans to join them—by offering a better standard of its own called Secure Digital Music Initiative (SDMI), which will include some form of copy protection to prevent or limit duplication of the record companies' music.

In early March, executives from more than 100 entertainment and electronics companies gathered in Los Angeles to hammer out details for the new audio compression standard. All the big names were there—from Sony, Toshiba and IBM to Time-Warner, Bertelsmann and EMI. Unfortunately, many of the participants saw the RIAA's pitch for a new audio standard as a chance to get their own proprietary compression technique adopted—so they can ask royalties for its use. Sony is pressing the SDMI group to adopt its MagicGate, while Toshiba is doing all it can to push its ID system as a replacement for MP3. Nippon Telegraph and Telephone is lobbying hard for the InfoBind system it has developed with Kobe Steel. Yet another proprietary compression technique is being proposed by Texas Instruments.

The good news is that Leonardo Chiariglione of Telecom Italia has been put in charge of the SDMI standards-setting body. Mr Chiariglione was the brains behind MP3. If he can work the technical magic a second time, fans will be able to get their hands on music collections from even the most obscure of artists who have little chance of getting distributed today—all courtesy of the Internet. And the really funny thing is that the Luddites of the record industry will be all the richer for it.